Gold sell-off accelerated after the US open. Bullion trades 1.75% lower, while traders await FOMC minutes
Gold continues to decline amid strengthening dollar. Since the beginning of the US session bond yields are moving higher, which would suggest that the market expects a hawkish tone of today's minutes. It is worth recalling that during the last meeting the Fed raised interest rates by 75 bp and today investors will be looking for hints whether one can expect another similar move in July.
However, a lot has changed since the last meeting, commodity prices have fallen sharply and the specter of a recession has become even more serious. Therefore, even if today's minutes show a good chance for another 75bp hike, it may turn out that ultimately the Fed will move towards a soft landing scenario. On the other hand, we should also pay attention to the recent Bullard comments, who suggests that the current rate hikes may be similar to those from the beginning of the 90s. Back then, the central bank lifted rates significantly, only to lower them sharply within a year. Today's minutes should not be treated as an answer to every question, but they will certainly lead to a lot of volatility. During today's session, apart from the gold sell-off, we can observe dollar strengthening and declines on Wall Street.
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Gold price continues to move lower and is approaching another round level. Source: xStation5
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